Current Affairs July 23, 2023; Russia-Ukraine Crisis, Quadrilateral Security Dialogue, Baltic States, NORD Stream 1 & NORD Stream 2, SWIFT

{GS2 – IR – Russia-Ukraine – 2023/07/23} Russia-Ukraine Crisis

• Ukraine and Russia were a part of the erstwhile USSR and share cultural, linguistic and familial links.
• Among the USSR nations, Ukraine was the second most powerful nation after Russia.
• The relations between the two nations were cordial from the dissolution of the USSR up until recently.
• Tensions began in late 2013 over Ukraine’s landmark political and trade deal with the EU.

2014: Euromaidan Movement

• Most Ukrainians were angry with the then pro-Russia President Viktor Yanukovych’s decision to join the Russia-led Eurasian Economic Union instead of the EU.
• Their protests were known as the Euromaidan movement, which saw massive clashes between the protesters and security forces that reached their peak in 2014 and led to the ouster of Yanukovych.
• Soon after, amid fears of growing Western influence in Ukraine (Ukraine slipping out of Russia’s sphere of influence), Russia invaded and annexed Crimea from Ukraine.

2022: Russia Invades Ukraine

• Russia was keeping the tensions high at the Ukraine border to get sanctions relief and other concessions from the West.
• Also, it was seeking assurances from the US that Ukraine would not be inducted into NATO.
• However, the failure of such assurance by the West, and the pro-outlook of Ukraine towards the West and NATO, gave an excuse for Russia to conduct a special military operation (later, a full-fledged invasion) on Ukraine on the pretext of demilitarisation and denazification of Ukraine.

Causes Behind the Deepening Crisis

Expansions Carried out by NATO

• Even after the dissolution of the Soviet Union (USSR), NATO continued its expansion. It started to pull former Warsaw Pact states into its membership.
• Both for Russia and the West, Ukraine acted as a crucial buffer at times of war or uncertainty. With Ukraine seeking NATO membership, this safe buffer for Russia was fast disappearing.

Balance of Power

• Ever since Ukraine split from the Soviet Union, both Russia and the West have vied for greater influence in the country to keep the balance of power in the region in their favour.

Russia’s Strategic Disadvantage Due to Geography

• Russia-Ukraine Crisis is also a fight to overcome geographical disadvantages faced by Russia.
• In the event of a war, the Russian navy cannot reach the Baltic Sea as NATO controls the Skagerrak Strait, which connects it to the North Sea.
• If Russia gets past the Skagerrak, the GIUK Gap (Greenland, Iceland, UK) in the North Sea will prevent its advance to the Atlantic.

  

• Beyond Bosporus Strait, the Aegean Sea, Mediterranean and Gibraltar Straits impede Russia’s movement to the Atlantic Ocean or its route to the Indian Ocean via the Suez Canal.

• Its naval facility in the Syrian coastal city of Tartus is strategic but limited.

  

Russia’s Demands

• A ban on further expansion of NATO to countries like Georgia that share borders with Russia.
• Pull back NATO’s military deployments to the 1990s level and prohibit the deployment of intermediate-range missiles in the bordering areas.
• NATO must curb its military cooperation with former Soviet republics, including Ukraine.

Response from the West

• The U.S. has ruled out changing NATO’s open-door policy, which means NATO would continue to induct more members. (Recently, Finland was inducted into NATO)
• The U.S. also says it would continue offering Ukraine training and weapons.
• The U.S. and the West are imposing new economic sanctions on Russia.

Way Forward: Minsk Agreements

• A practical solution for the Russia-Ukraine situation is to revive the Minsk peace process.

• Minsk agreements were signed to stop the ongoing conflict between pro-Russian separatists and the Ukraine administration in the mineral-rich Donbas region of Ukraine.

Minsk I

• Ukraine and the Russian-backed separatists agreed on a 12-point ceasefire deal in the capital of Belarus in 2014. Its provisions included:
  • prisoner exchanges,
  • deliveries of humanitarian aid, and
  • the withdrawal of heavy weapons.
• The agreement quickly broke down, with violations by both sides.

Minsk II

• In 2015, an open conflict was averted after the ‘Minsk II’ peace agreement was signed under the mediation of France and Germany.
• Representatives of Russia, Ukraine, the Organisation for Security and Cooperation in Europe (OSCE) and the leaders of two pro-Russian separatist regions signed a 13-point agreement.
• The five most important of the 13 points were, in brief:
  • An immediate and comprehensive ceasefire.
  • Withdrawal of all heavy weapons by both sides.
  • Restore complete control of the state border by the government of Ukraine.
  • Withdrawal of all foreign armed formations, military equipment and mercenaries.
  • Constitutional reform in Ukraine, including decentralisation, with specific mention of Donetsk and Luhansk (paving the way for their secession from Ukraine!).

Effect of Russia-Ukraine Crisis on Global Supply Chain

Disrupted Ukrainian Exports

• Ukraine is the largest crop-producing country in Europe and is known as the breadbasket of Europe.
• It has high-quality soil in its eastern and southeastern parts (the most vulnerable to Russia’s invasion).

• Ukraine accounts for more than 25% of the world’s trade in wheat and more than 60% of global sunflower oil, and 30% of global barley exports.
• It sends over 40% of its wheat and corn exports to the Middle East or Africa.
• Some 45%-54% of the world’s semiconductor-grade neon, critical for the lasers used to make chips, comes from Ukrainian firms, which are now shut following the attack by Russia.
• The stoppage casts a cloud over the worldwide output of chips already in short supply.

Disrupted Russian Exports

• Russia is the world’s largest supplier of wheat.
• Russia is also a major global exporter of fertilisers.
• Europe gets nearly 40% of its natural gas and 25% of its oil from Russia.
• Russia is a significant source of many critical minerals deemed vital, including 30% of the globe’s supply of platinum-group elements, 13% of titanium and 11% of nickel.
• Russia is also a significant neon source, used for etching circuits on silicon wafers.
• Russia exports rare metals like palladium to make semiconductors.

What is Palladium? Palladium is a rare metal used as an alternative to gold in making various devices, as the metal is highly malleable and corrosion-resistant. Russia and South Africa are the two largest producers of palladium. Applications: Automobile makers, electronics manufacturers, and biomedical device production.

Black Sea Grain Initiative

• Context (TH): Russia suspended the Black Sea Grain Initiative until its demands to allow the export of food and fertiliser to the world are met.
• Black Sea Grain Initiative was launched in Istanbul by Russia, Türkiye, Ukraine, and the UN in 2022.
• This initiative allows commercial food and fertiliser (including ammonia) exports from Ukrainian ports to global markets via the Black Sea.

• The purpose was to contribute to the prevention of global hunger, to reduce and address global food insecurity, and to ensure the safety of merchant ships delivering grain and foodstuffs.

{GS2 – IR – Russia-Ukraine – 2023/07/23} Strategic Regions/Infrastructure

Crimea

• The Isthmus of Perekop connects the Crimean Peninsula to mainland Ukraine.
• In 2014, Russia invaded and subsequently annexed the pro-Russian Crimean Peninsula from Ukraine.

Why is Crimea so important for Russia?

• Vladivostok, the largest Russian port on the Pacific Ocean, is enclosed by the Sea of Japan, which the Japanese dominate.
• This does not just halt trade flow but prevents the Russian fleet from operating as a global power, as it does not have year-round access to the world’s most important sea lanes.
• Moreover, most of the Russian ports, even when open for business, do not allow for easy access to the Mediterranean Sea.
• This has left Russia with a military incentive to expand in the warmer water port of Crimea.

Sevastopol Port

• Warm-water ports are essential to Russian security because they enable Russia to control the sea, project power, maintain good order, and observe a maritime consensus.
• The Port of Sevastopol is considered a critical hold for maritime routes between the Black Sea and Sea of Marmara, and, therefore, the Mediterranean Sea and the Atlantic Ocean.
• The port is one of the few warm deep-water ports available to Russia in the Black Sea.
• Also, the Russian Black Sea Fleet is situated in Sevastopol. Its presence in the area gives Russia a military advantage, and it can carry out tactical manoeuvres (as it did in the Georgian-Russian conflict).
• Its importance has grown since the Syrian conflict because losing the Tartus fleet in Syria would mean having only one warm-water port in Sevastopol.

Donbas Region

• Russia officially announced the independence of the Donetsk and Luhansk republics, effectively killing the Minsk agreements. Both Donetsk and Luhansk are collectively called as Donbas Region.

Significance of Region

• It is essential to Russia’s current vision for Ukraine, as it contains areas controlled by Russian-backed separatist groups. Also, resource-wise, the Donbas region is rich in coal.

NORD Stream 1 and NORD STREAM 2

• Nord Stream is a set of offshore natural gas pipelines in Europe, running under the Baltic Sea from Russia to Germany.
• It includes 2 projects:
  1. Nord Stream 1: Running from Vyborg in northwestern Russia near Finland.
  2. Nord Stream 2: Running from Ust-Luga in northwestern Russia near Estonia.

Who is against Nord Stream 2?

• The US and UK, along with Russia’s neighbours Poland and Ukraine, strongly oppose Nord Stream 2.
• They fear that if they were to start operating, it would give Russia even more of a stranglehold over gas supplies to Europe.

{GS2 – IR – Russia-Ukraine – 2023/07/23} Some International Organisations in News

North Atlantic Treaty Organization (NATO)

• NATO is a political and military alliance created in the aftermath of World War II by 12 countries from Europe and North America in 1949.
• The Washington Treaty (North Atlantic Treaty) forms the basis of NATO.
• The headquarters of NATO is in Brussels, Belgium, while the Allied Command Operations headquarters is near Mons, Belgium.
• During the Cold War, NATO operated as a check on the threat posed by the Soviet Union (USSR).
• The alliance remained in place after the dissolution of the Soviet Union and the Warsaw Pact.

Functioning

• North Atlantic Council is NATO’s principal political decision-making body.
• The principle of collective defence (an attack against one Ally is an attack against all) is enshrined in Article 5 of the North Atlantic Treaty, which commits NATO members to mutual defence.

Member States

• Currently, NATO comprises 31 countries (29 European + 2 North American).
• NATO makes its decisions by consensus. Hence, if a new country wants to join NATO, it must be supported by all other members. Any of its member countries can veto a new member.
• For example, Turkey opposes Sweden’s wish to join NATO due to its alleged support of Kurdish militants.

Post-Cold War Era

• When the Soviet Union collapsed in 1991, questions were raised about NATO’s relevance and future.
• NATO succeeded in refashioning from collective defence to collective security.
• It has been a mutually beneficial arrangement, offering security to Europe at a low price.
• For the U.S., NATO has been an ideal vehicle for power projection worldwide.
• NATO has been involved in military operations in the Balkans, the Middle East, South Asia, and Africa.

Switzerland, Moldova and Belarus are neither NATO nor EU members. Austria is a member of the EU but not NATO The UK is a member of NATO but not the EU. Warsaw pact It was a collective defence treaty signed in 1955 by Russia and seven other states to counter the US-led NATO. (All these seven states are now members of NATO) It was abolished in 1991. Collective Security Treaty Organization (CSTO) The USSR’s successor Russia and some other post-Soviet states joined the CSTO in 1992. Current members of CSTO are Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Armenia and Belarus.

European Union (EU)

• The European Union (EU) is a political and economic union of 27 member states.
• It was established in 1993 when the Maastricht (Netherlands) Treaty was enacted.
• It traces its origins to the
  1. European Coal and Steel Community (ECSC), established by the 1951 Treaty of Paris, and
  2. European Economic Community (EEC), established by the 1957 Treaty of Rome.
• The EU has developed an internal single market through a standardised system of laws that apply in all member states in those matters where members have agreed to act as one.
• EU policies aim to ensure
  • the free movement of people, goods, services and capital within the internal market;
  • enact legislation in justice and home affairs; and
  • maintain standard policies on trade, agriculture, fisheries and regional development.

Members

• Original members: Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany.
• Members that adopted the Euro: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia and Spain.
• Members that have not adopted the Euro: Hungary, Czech Republic, Sweden, Denmark, Croatia, Romania and Bulgaria.
• On 31 January 2020, the United Kingdom became the first member state to leave the EU.
• Earlier, French Algeria (Colonial Algeria), Greenland (Denmark) and Saint Barthélemy (French Overseas Territory in the Lesser Antilles) — had left the EU.
• The only member state of the EU wholly outside of Europe is Cyprus, which is in Asia.

Schengen Area

• Schengen Area signifies a zone where 27 European (not to be confused with EU) countries abolished their internal borders for the free and unrestricted movement of people.

• Passport controls have been abolished for travel within the Schengen Area.
• Schengen Area covers most of the EU countries, except Ireland, and the countries soon to be part of the Schengen Area — Romania, Bulgaria, and Cyprus.
• Although not members of the EU, countries like Norway, Iceland, Switzerland and Lichtenstein are also part of the Schengen zone.

Quad or Quadrilateral Security Dialogue (QSD)

• Quad is a strategic security dialogue between Australia, India, Japan, and United States.
• The dialogue was initiated in 2007 by the Japanese PM.
• The dialogue was paralleled by joint military exercises, titled Exercise Malabar.
• The diplomatic and military arrangement is widely viewed as a response to increased Chinese economic and military power. Therefore, Quad is sometimes referred to as Asian NATO.
• Quad Plus Members: New Zealand, South Korea and Vietnam.

Others

Eurasian Economic Union (EEU)

• It is an economic union of post-Soviet states in Eastern Europe, Western Asia and Central Asia.
• EEU Treaty was signed by the leaders of Belarus, Kazakhstan, and Russia and came into force in 2015.
• It encourages the free movement of goods and services and provides for standard policies in the macroeconomic sphere, transport, industry, agriculture, etc.

Organization for Security and Cooperation in Europe (OSCE)

• OSCE is a security-oriented intergovernmental organisation with observer status at the UN.
• It is based in Vienna, Austria.
• It has 57 members spanning Europe, Asia, and North America. India is not a member.
• Its mandate includes issues such as arms control, promotion of human rights, freedom of the press, and fair elections.

Three Seas Initiative (3SI)

• 3SI brings together 12 EU member states between the Adriatic Sea, the Baltic Sea and the Black Sea.
• The initiative is designed to contribute to economic growth and energy security in Europe.
• Members: Austria, Bulgaria, Estonia, Croatia, Lithuania, Latvia, Poland, Romania, Slovakia, Slovenia, the Czech Republic and Hungary.
• Partners: the United States, Germany and the European Commission.

Bucharest Nine (Bucharest Format/B9)

• B9 is a group of nine EU & NATO countries in Eastern Europe (that joined NATO after the Cold War).
• It is regarded as the “voice of the Eastern Flank” in the NATO alliance.
• Members: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, and Slovakia. (B9 = 3SI minus Austria, Slovenia and Croatia)

Normady Format of Dialogue

• The Normandy format is a diplomatic grouping of Germany, Russia, Ukraine, and France created in 2014 to find a peaceful resolution to the conflict following Russia’s military aggression.

{GS2 – IR – Russia-Ukraine – 2023/07/23} Locations/Places/Features In-News

Ukraine

• Ukraine shares borders with:
  • Belarus to the north
  • Russia to the east
  • Sea of Azov and the Black Sea to the south
  • Moldova and Romania to the southwest
  • Hungary, Slovakia and Poland to the west
• The capital is Kyiv (Kiev), located on the Dnieper River.
• The most notable rivers of Ukraine include the Dnieper and Dniester.
• Most of the rivers of Ukraine drain into the Black Sea and Azov Sea of the Mediterranean basin.
• Important Cities: Kyiv, Kharkiv, Odesa, Donbas Region, Mykolaiv, Mariupol, Simferopol, etc.

Dnieper River

• The Dnieper (Dnipro River) is the fourth longest river in Europe after the Volga, Danube, and Ural.
• It flows through Russia, Belarus, and Ukraine.
• It is the longest river in Ukraine.
• It originates from the Valdai Hills (Russia) and empties into the Black Sea at the Dnieper-Bug Estuary.
• Along the Dnieper River, several reservoirs and hydroelectric power stations have been constructed. The most notable of these is the Kyiv Reservoir.

Jone 2023 Kakhovka Dam Breach

• Context (CNN | IE | TG): Kakhovka Dam on the Dnieper River that separates Russian and Ukrainian forces in southern Ukraine was breached, unleashing floodwaters across the war zone.
• Ukraine accused that it is an act of “ecocide” committed by Russia.
• Kakhovka Dam is a Soviet-era dam built on the Dnieper River in Kherson (currently under Russian control), Ukraine.
• It supplies water to the Crimean peninsula (which was annexed by Russia in 2014) and to the Zaporizhzhia nuclear plant (which is also under Russian control).

Ecocide is destroying the natural environment by deliberate or negligent human action.

Zaporizhzhia Nuclear Power Plant

• Zaporizhzhia Nuclear Power Plant is Europe’s largest nuclear plant.
• It is located on the Dnieper River in Zaporizhzhia, Ukraine.
• It gets its cooling water from the Kakhovka Dam.

Chernobyl Nuclear Plant

• It is a closed nuclear power plant located near the abandoned city of Pripyat in northern Ukraine.
• The plant experienced a major nuclear accident on 26 April 1986 (Ukraine was a part of USSR).
• The explosion and fire at the Chornobyl No. 4 reactor contaminated the soil, water and atmosphere with radioactive material equivalent to 20 times the atomic bombings of Hiroshima and Nagasaki.

Red Forests in Ukraine

• The Red Forest is the 10 sq km area surrounding the Chornobyl Nuclear Power Plant.
• The name “Red Forest” comes from the ginger-brown colour of the pine trees after they died following the absorption of high levels of radiation from the Chornobyl accident.

Sea of Azov

• It is a sea in Eastern Europe connected to the Black Sea by the narrow Strait of Kerch.
• It is sometimes regarded as a northern extension of the Black Sea.
• The sea is bounded by:
  • Russia on the southeast
  • Ukraine in the northwest
• The main rivers flowing into it are the Don and Kuban.
• The Sea of Azov is an internal sea with passage to the Atlantic Ocean through the Black, Marmara, Aegean and Mediterranean seas.
• The narrowness of the Kerch Strait limits the water exchange with the Black Sea. As a result, the salinity of the Sea of Azov is low.
• Ports along the Sea of Azov are Berdyansk, Mariupol, Taganrog and Yeysk.

Black Sea

• Black Sea is a marginal Mediterranean Sea lying between Europe and Asia. It lies:
  • East of the Balkan Peninsula (Southeast Europe)
  • South of the East European Plain in Eastern Europe
  • West of the Caucasus
  • North of Anatolia in Western Asia.
• It is supplied by significant rivers, principally the Danube and Dnieper.
• There is a significant absence of oxygen in the Black Sea water.
• Mountain Ranges: Pontic Mountains (South), Caucasus Mountains (East) and Crimean Mts (North).

• Important coastal cities include Istanbul, Odesa, Varna, Samsun, Sochi, Sevastopol, Constanța, Trabzon, Novorossiysk, Burgas, Batumi, etc.
• Countries bordering the Black Sea:
  1. Bulgaria
  2. Georgia
  3. Romania
  4. Russia
  5. Turkey
  6. Ukraine
• It ultimately drains into the Mediterranean Sea via the Turkish Straits and the Aegean Sea.
• To the north, the Black Sea is connected to the Sea of Azov by the Kerch Strait.

Kerch Bridge

• Context (TH I HT): The 19km long Kerch Strait Bridge links the Russian mainland to the Crimean Peninsula in the Black Sea. The bridge symbolises Russia’s control over Crimea.
• Built by Russia after the annexation of Crimea at the start of 2014, the bridge cost US$3.7 billion.

Turkish Straits

• They create a series of passages that connect the Aegean and Mediterranean seas to the Black Sea.
• The Bosporus Strait connects the Black Sea to the small Sea of Marmara, which is connected to the Aegean Sea via the Strait of the Dardanelles.

Montreaux Convention

• According to the 1936 Montreux Convention, Turkey (a NATO member) controls the Bosporus and Dardanelles Straits (Turkish Straits) — a significant concern for Russia.
• In the event of a war, the pact gives Ankara the right to regulate the transit of naval warships and to block the straits to warships belonging to the countries involved in the conflict.

Sea of Marmara

• The Sea of Marmara is an inland sea separating the Asiatic and European parts of Turkey.
• Bosphorus, the Dardanelles Straits and the Sea of Marmara form a part of the Turkish Straits System.
• North Anatolian Fault, which runs beneath the sea, has caused massive earthquakes in the region.

Caspian Sea

• The Caspian Sea is the world’s largest inland body of water.
• The Caspian Sea, like the Black Sea, is a remnant of the ancient Paratethys Sea.
• The Caspian Sea is highly prized for its vast oil and gas reserves
• It is bounded by Kazakhstan, Russia, Azerbaijan, Iran and Turkmenistan.
• Its main freshwater inflow comes from Europe’s longest river, the Volga and the Ural River.

Baltic States (Baltics, Baltic nations)

• Baltics is a geopolitical term typically used to group the three countries on the eastern coast of the Baltic Sea: Estonia, Latvia and Lithuania.
• The three countries do not form an official union but cooperate in matters of security and defence.
• All three countries are members of NATO (to counter the bullying by Russia), the eurozone, the OECD, and the European Union.

Carpathian Mountains

• Carpathian Mountain Range forms an arc across Central and Eastern Europe. Roughly 1,500 km long, it is the 3^rd longest European mountain range after the Urals and Scandinavian Mountains.
• Countries covered by range:
  • Czech Republic
  • Austria
  • Slovakia
  • Poland
  • Ukraine
  • Romania (50%)
  • Serbia
• The highest range within the Carpathians is known as the Tatra Mountains in Slovakia and Poland.

{GS3 – IE – Banking – 2023/07/23} SWIFT

• Context (LM): Several EU countries have blocked some Russian banks from the SWIFT system to block Russia’s access to financial markets worldwide.
• SWIFT stands for The Society for Worldwide Interbank Financial Telecommunication.
• It is a Belgian cooperative society (members frame the rules) that provides a secure financial message/communication network between banks globally to avoid fraudulent transactions.
• It, however, does not manage accounts or hold funds on behalf of individuals or financial institutions.
• It also does not perform clearing or settlement functions. After payment is initiated, it must be settled through a payment system.

SWIFT Code

• SWIFT provides a unique SWIFT code (an 8 or 11-digit code) to each member institution, which helps identify the financial institution (banks and branches) during an international transaction.
• Some banks may have one SWIFT code (Bank Identifier Code or BIC) for all their branches, while others have unique SWIFT codes for each branch.

How Does the SWIFT Code Help?

• Let’s suppose a person has a bank account in one bank, and he needs to transfer the money to another person having a bank account in another bank in another country.
• In that case, the first person must walk into his bank with the account number of another person and its unique SWIFT code.
• The bank will send a SWIFT message for a payment transfer via a secured network.
• Encryption is added when the message is sent, and it is then decrypted when the message is received.
• Once the other bank receives the SWIFT message of incoming payment, it will clear the credit into another person’s bank account.

Importance

• SWIFT ensures the faster transfer of information from one bank to another bank regardless of whether both banks are in the same country or not (it is usually not used/required for domestic transfers).
• It provides the highest level of integrity and confidentiality, which is proved by its world renounce.how swift system works